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Gribkowsky rumours raise big questions

NEWS STORY
12/05/2013

Just over a year ago a court in Munich found Formula One’s former chairman Gerhard Gribkowsky guilty of receiving a £28.6m ($44m) bribe from the sport's boss Bernie Ecclestone and his Bambino family trust. Gribkowsky was sentenced to eight and a half years in prison and it sparked a stream of reports in the German media predicting that Ecclestone would soon be charged with paying the bribe. As every day has passed this looked increasingly unlikely but the rumours in Germany haven't gone away.

The rumours tend to originate from the Suddeutsche Zeitung newspaper which wrote a flurry of reports last year claiming that prosecutors in Germany want to bring Ecclestone to court over the bribe. One of its journalists even predicted when Ecclestone would be charged. After this failed to happen his articles about the case became less frequent and his botched prediction is a thing of the past. Now he is at it again.

To recap on a bit of the background, Gribkowsky became F1's chairman through his position as chief risk officer for state-owned German bank BayernLB which was the biggest single shareholder in F1's parent company SLEC. BayernLB owned 47.2% of SLEC and it got the shares from German media company Kirch which went bankrupt in 2002. BayernLB had given Kirch a £643m ($987.5bn) loan to buy the shares so when it went under the bank seized them in order to sell them and recoup its money.

Gribkowsky was in charge of the sale and the Munich court ruled that it in return for receiving the £28.6m from Ecclestone and Bambino he agreed to sell F1 to its current owner, the private equity firm CVC. The court claimed that Ecclestone instructed Gribkowsky to sell to CVC because it had agreed to retain him as F1's boss. In contrast, Ecclestone says that Gribkowsky threatened to make false allegations about him to the UK's tax authority HM Revenue & Customs (HMRC) if the money was not paid.

In July 2011 Ecclestone revealed to Pitpass' business editor Christian Sylt that Gribkowsky threatened to tell HMRC that he had control over Bambino. The trust has made billions of Pounds from selling stakes it owned in F1 and, crucially, since it is based offshore in Liechtenstein no tax has been paid on the money. Since Ecclestone is a UK resident he pays tax in the country and, under the Income Tax Act 2007, if he was found to have power over the trust he would liable to pay tax on the money in it.

So if HMRC had believed Gribkowsky it could have left Ecclestone with a huge bill to pay. In November 2011 he confirmed this when he was a witness in the trial against Gribkowsky and told the Munich court that he would have had to pay "probably in excess of £2bn." In the end the court didn't go along with this version of events as Gribkowsky gave testimony which corroborated the theory that he had been bribed. It was reported that Gribkowsky suspected the court would find him guilty anyway and giving this testimony reduced his sentence.

Soon after being found guilty Gribkowsky lodged an appeal against the decision but it recently came to light that this has been dropped. It is hardly surprising given that his own testimony was used as evidence to convict him. The more surprising news was soon to follow.

On Saturday the Suddeutsche Zeitung wrote that German authorities have completed an investigation into Ecclestone's role in the affair "and will bring charges in the Munich district court in May." The newspaper added that the charges could be filed with the court "maybe even before Pentecost (19 May)." So, that gives them 19 days at most and 7 at the least. The funny thing is that we have been down this road before.

The latest article was written by Klaus Ott who was responsible for the predictions last year about when Ecclestone would be charged.

Ott got off to a flying start. Four days before Gribkowsky was found guilty on 27 June he wrote an article entitled ‘Ecclestone in court! A trial of the Formula 1 boss is the cleanest solution'. It became a recurring theme which ultimately suggested it was all but inevitable that Ecclestone would be charged by the end of 2012.

The following month Ott wrote that "investigators want to bring the Formula 1 boss to court." This was repeated in August when he claimed that "after Gribkowsky, the prosecution also wants to bring Ecclestone to court." It didn't change in September with the claims that "the Briton has to expect a bribery charge" and that the prosecutor wants "to complete its investigation in autumn into bribes paid to the public official Gribkowsky and sue the racing boss."

This was followed up on 26 November with Ott's allegation that "the indictment against Ecclestone is expected in the coming weeks." Of course that never happened and this brings us neatly back to Ott's piece on Saturday which insists that the German authorities "will bring charges in the Munich district court in May." Many people may well see this as crying wolf or perhaps coming up with so many alternatives that one may prove to be accurate. Either way, it clearly isn't reliable reporting.

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